Labour promised to build 100,000 houses. It has built 47 so far.
When Labour was elected in September 2017, it campaigned on the promise of building 100,000 new homes under the Kiwibuild programme within 10 years. One thousand of those are supposed to be built by July.
How many homes for New Zealanders have actually been constructed since Labour took office? Forty-seven. Only 47 housing units have been completed, with critics of Kiwibuild saying they're still too expensive for first-home buyers.
Currently, there are 11,600 people on public housing waiting lists in New Zealand, and neither building no buying a Kiwibuild house is subsidised by the Government. It acts only as a guarantor that houses WILL be built – an unsuccessful one, for sure.
What's the hold up? Here's what the experts think:
Shamubeel Eaqub, reknowned New Zealand housing economist, says there has been no incentive for builders. “The government is telling builders to use exactly the same processes we have in place now, but build cheaper houses,” Eaqub says. “That’s why you’ve seen very few builders participate.”
Hugh Pavletich, one of the authors of the latest Demographia report on international housing affordability, says the Labour government is “messing around” because it is focusing too much on the PR effort of telling people about building 100,000 houses, rather than actually freeing up land to build them.
He says: “If they’d got out of the starting blocks with structural reforms centered around land supply and infrastructure financing soon after the election, it would have sent a far clearer signal to the market and subdued it significantly as these changes were put in place.”
From our perspective, the Government also failed by leaving out proper quantity surveying consultancy from its 100,000 plan. In order to undertake such a project, the Government should have been guaranteeing 2.7 houses are completed every day for the 12 months between July 2018 and July 2019 – that's how it could reach its initial 1000 homes target.
In order to do that, the Government needed a much better idea of how much building a home in New Zealand actually costs, and where those costs go. Instead, Labour's team, led by Phil Tyford, has simply asked the industry to build homes “cheaper” with professional guidance on methods of doing so.
Moreover, the Government also needs more quantity surveyors in the business. The immediate solution for this is opening more pathways for qualified QS professionals from Europe and elsewhere to move to New Zealand.
When Kiwibuild ramps up production, if that ever happens, it will need to be completing 33 houses a day to reach 100,000. From 2021 to 2028, it is supposed to be producing 12,000 houses each year. There's no way the Government can do this unless they actually start consulting the trades that actually work in the construction industry, and get an accurate understanding of the market.
